FTR’s Shippers Conditions Index falls into negative territory

The July edition of theShippers Conditions Index (SCI), which was issued this week by freight transportation consultancy FTR, trended down into negative territory.

FTR describes the SCI as an indicator that sums up all market influences that affect the transport environment for shippers, with a reading above zero being favorable and a reading below being unfavorable and a “less-than-ideal environment for shippers.”

July’s SCI reading—at -0.36—was down from June’s 1.03 and well below May’s 24.8, which marks the second highest reading on record, with April’s 41.3 being the highest. The strong April and May readings reflected what the firm called a “huge positive spike as COVID-19 impacted freight movement.”

But it added that the June and July readings are now reflecting a continued weakening of market conditions for shippers, adding that freight volume and utilization were actually more favorable to shippers in July, while the rate environment swung from significantly positive in June to a significantly negative reading in July.

“It has been harder than expected to bring truck drivers back into the driver pool,” Todd Tranausky, vice president of rail and intermodal at FTR, said in a statement. “This has created tightness in the truckload market that has bled over into the intermodal space. It is unknown how long the present situation will last, as it may be related to retail restocking or part of a longer-term shift in spending away from services and toward goods. A shift toward goods would result in stronger freight demand and worse conditions for shippers.”